by Dan Ikenson, policy analyst, Center for Trade Policy Studies, Cato Institute

Last October, an association of U.S. manufacturers of wooden bedroom furniture and some unions representing workers in the industry filed an antidumping petition with the U.S. International Trade Commission and the U.S.Department of Commerce seeking relief from injury allegedly caused by unfairly priced import competition from China.

After an extended evaluation as to whether there was sufficient support for the petition within the domestic industry, an investigation into the allegations was initiated in December 2003.In January 2004, the ITC rendered a preliminary determination that there is a reasonable indication that less-than-fair-value imports from China are causing material injury to the domestic industry. The DOC is expected to announce its preliminary findings regarding the levels of dumping and the application of antidumping duties by June 17, 2004.

Whether the DOC will calculate affirmative antidumping duties is not much of a mystery. It almost always does particularly in cases involving China, where it utilizes a calculation methodology that has no foundation in logic or fairness.What remains a mystery is whether policymakers will continue to sit idly by as the antidumping law is misused once again to impose trade restrictions under false pretenses.

The case of Wooden Bedroom Furniture from China has nothing to do with unfair trade and is a perfect example of the need for antidumping reform. The filing of this case was a tactical maneuver by one group of domestic producers that seeks to exploit the gaping loopholes of the antidumping law to get a leg up on its domestic competition. Domestic producers realize that the only way to compete and offer their customers variety is to source at least some production from abroad. Instead of preserving or returning domestic jobs(which is the public justification for the petition) import restrictions will cause a shift in sourcing from China to places like the Philippines, Indonesia, Brazil, and Vietnam—places from which many of the petitioners have begun or are poised to begin importing themselves.

This case demonstrates the ease of access to a commercially disruptive weapon that is presumed naively to be reserved for cases of unfair trade. In reality, the antidumping law as written and applied is incapable of identifying unfair trade and is used with increasing frequency to hamper legitimate competition, both foreign and domestic. The unfortunate end result is a greater cost burden for import-using industries and higher prices for consumers.